Facebook Stock is a Gamble, Even to Underwriters

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The stock market is the world's greatest casino. You buy stock and let it ride, hoping it gains in value and praying it doesn't prove worthless. Fortunes are made and lost. And the Facebook initial public offering is no different.

Facebook's IPO happened on Friday, with shares starting at $38, and since then there's been no meteoric rise in price. Now four days later, shares are now hovering around $32. The disappointment was so huge that now Wall Street is finger pointing and blaming each other for losses.

Underwriter Morgan Stanley bought shares to stabilize the price and protect its investment, wrote the New York Times. Morgan Stanley and Facebook also reportedly ignored advice on how to price the stock and chose the higher end at $38 a share which may have caused some of its current troubles.

Add to the mix that the Nasdaq was overwhelmed with initial trading and essentially slowed to a snail's pace for a half-hour -- that's an eternity in the stock market. "We were trading blind for 2 1/2 hours," Thomas Joyce of Knight Capital Group told CNBC.

All in all, it was a bad showing, not just by the stock but by its underwriters, pricing and Nasdaq. The backbiting doesn't help the situation.

So what is Facebook worth? There are guesses -- $20 if you believe Business insider -- but the Insider raised a more significant point. Stock prices rise on how much the company is expanding or succeeding, and we can tell you expanding is a lot easier than succeeding. If Facebook wants to improve its stock price it has to get to work gaining more users and cash.